Industrial Policy

Role Of Industrialisation

 1. Employment for deepening labor market

 2. Allows improvement in standard and
quality of living
 3. Improves balance of payments
 4. Provides certain element of national
prestige
Industrial Policy
 It covers rules, regulations, principles,
policies, & procedures laid down by
government for regulating & controlling
industrial undertakings in the country.
 It prescribes the respective roles of the
public, private, joint, cooperative large,
medium & small scale sectors for the
development of industries.
Main Objectives
 To maintain a sustained growth in
productivity
 To enhance gainful employment
 To prevent undue concentration of
economic power
Main Objectives
 To achieve optimal utilization of human
resources
 To attain international competitiveness
and
 To transform India into a major partner
and player in the global arena
Industrial Policies

 Industrial Policy Resolution of 1948

 Industrial Policy Resolution of 1956
 Industrial Policy Resolution of 1973
 Industrial Policy Resolution of 1977
 Industrial Policy Resolution of 1980
 The New Industrial Policy of 1991
Industrial Policy 1991
 Policy focus is on –
 Deregulating Indian industry;
 Allowing the industry freedom and

flexibility in responding to market

forces and
 Providing a policy regime that

facilitates and fosters growth of Indian

industry.
Industrial Policy 1991
 In pursuit of the industrial objectives,
Government decided to take a series of
initiatives in respect of the policies relating
to the following areas:
 Industrial Licensing
 Foreign Investment
 Foreign Technology Agreements
 Public Sector Policy
 MRTP Act
Industrial Licensing Policy
 The Industrial Policy Resolution of 1956
identified the following three categories of
industries:
 Those that would be reserved for development in
public sector.
 Those that would be permitted for development
through private enterprise with or without State
participation.
 Those in which investment initiatives would
ordinarily emanate from private entrepreneurs.
Industrial Licensing Policy
 Industrial Licensing is governed by the
Industries (Development & Regulation)
Act, 1951.
 Industrial licensing was abolished for all
industries, except those specified (06
industries), irrespective of levels of
investment.
Foreign Investment
 Limit on foreign equity holdings raised from
40% to 51% in a wide range of industries
 Foreign Equity Proposals need not to be
accompanied by Foreign Technology
Transfer Agreement
 Procedure for FDI streamlined by creating a
Foreign Investment Promotion Board to
consider individual application case by case
Foreign Technology Agreements

 Foreign technology agreements in high-

priority industries upto Rs. 1 crore were given
automatic permission.
 No permission was required for hiring foreign
technicians and foreign testing of
indigenously developed technologies.
Public Sector Policy
 List of industries reserved for the public (Schedule
A) reduced from 17 to 06

 List of sector reserved for dominance by public

sector (Schedule B) effectively abolished

 Disinvestment in selected public sector enterprise to

raise finance for development, bring in greater
accountability & help create a new culture in their
working for improved efficiency